Tullow Oil falls to four-month low

Shares slump after UK explorer postpones Ethiopia well

Tullow Oil shares fell 4.9 per cent today, the lowest proce since December. Photograph: Shannon Stapleton/Reuters

Tullow Oil shares fell 4.9 per cent today, the lowest proce since December. Photograph: Shannon Stapleton/Reuters

Mon, Apr 15, 2013, 13:20

Tullow Oil Plc, the UK explorer searching for Ethiopia's first crude, fell to a four-month low in London trading after delaying the Sabisa well.

The shares slumped as much as 4.9 per cent to 1,103 pence, the lowest intraday price since December 12th, and traded at 1,104 pence at 9.26 am.

"Hole instability issues have required the drilling of a sidetrack," or secondary wellbore, the London-based company said today in a statement. "The sidetrack recently commenced and a result is now expected in late May," rather than in March as previously planned.

Tullow's partner in the project, Africa Oil Corporation, fell 5 per cent in Toronto on April 12th after shareholder Lukas Lundin said drilling had been set back by technical difficulties.

The exploration group, which also includes Marathon Oil Corporation, has drilled Sabisa in western Ethiopia to 1,810 meters and found evidence of hydrocarbons in sands, Tullow said today.

Separately, the company said its Ngamia-1 well in Kenya flowed 281 barrels of oil a day during tests. Tullow and Africa Oil announced Kenya's first oil discovery at Ngamia-1 in the Turkana region in March last year.